Question
SmartWare Inc. recorded the following financial data for the year: SmartWare Inc. reported sales revenue of 700,000, operating expenses of 250,000, interest expense of 40,000,
SmartWare Inc. recorded the following financial data for the year:
SmartWare Inc. reported sales revenue of £700,000, operating expenses of £250,000, interest expense of £40,000, tax expense of £50,000, and net income of £90,000 for the year.
Requirements:
- Calculate the interest coverage ratio for SmartWare Inc.
- Prepare a detailed income statement for the year ended 31 December 2021.
- Discuss the potential effects of changing interest rates on SmartWare Inc.'s profitability.
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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen
16th edition
125927716X, 978-1259687969, 1259687961, 978-1259277160
